Joint submission by: Climate Action Network (CAN), Global Campaign to Demand Climate Justice (DCJ), and Women and Gender Constituency (WGC) on Criteria for Assessing Finance to Address Loss and Damage 

We are in the era of loss and damage. As the global community has not yet been able to sufficiently reduce emissions at the scale and timeframe required, and as the consequences of climate change now often extend beyond what people can adapt to, there is an urgent need to support developing countries and communities to comprehensively address loss and damage. This will require that developed countries provide new and additional finance to countries and communities in the Global South to address the economic and non-economic losses and damages associated with climate change, including:

• In the aftermath of extreme climate events such as floods and fires (e.g. for repairing roads and other infrastructure); 
• For medium-term recovery and rehabilitation (e.g. compensation to and retraining for those who lost their livelihood as a result of climate impacts; temporary relocation); 
• For slow onset events such as sea-level rise and for longer-term planning, policy frameworks, and transformative programming (e.g. permanent relocation or a transition to alternative livelihoods); and
• For addressing irreversible damage (e.g. loss of biodiversity, including extinction of species; loss of culture; loss of heritage; forced migration, loss of territory).  

Recognizing the need to address loss and damage, at the 27th Conference of Parties (COP 27) governments agreed to establish a new fund explicitly designed to address loss and damage. In addition to the to-be-operationalized Loss and Damage Fund, there are numerous multilateral, bilateral, and private sector funding streams that some consider to be part of the so-called funding arrangements for loss and damage.

Given the distinct purpose of loss and damage finance and the need to ensure that such finance does not detract from or get double counted as Official Development Assistance (ODA), humanitarian assistance, or climate adaptation and mitigation finance, there is a need to more clearly define and assess what constitutes finance to address loss and damage. 

To that end, this paper puts forward six key criteria to be used in assessing what counts as finance for loss and damage:

• Recognize and aim to comprehensively address loss and damage;
• Be obligatory and compensatory, with funding provided as grants and non-debt creating instruments;
• Be new, additional, predictable, and adequate;
• Be equitably governed and provided, including by prioritizing direct access for all developing countries and affected communities therein;
• Ensure the meaningful and effective participation of affected communities; and
• Acknowledge, respect, and promote intersectional human rights.